Companies that go online require (i) a multitude of application services and (ii) high end servers to run these applications. Examples of relevant application services include Hyper Text Transfer Protocol (HTTP), Domain Name System (DNS), File Transfer Protocol (FTP), proxy, firewalls and business applications. To achieve this, such companies face considerable overheads in installing and updating the applications and maintaining the servers. This drives the emergence of a new business model, namely, hosting applications over the web.
The demand for this business model is growing at a rapid pace, because of significant opportunities in hosting e-commerce and e-business applications for Small and Medium Businesses (SMBs). SMB managers often seek to outsource application hosting to service providers to avoid the capital expenses incurred by computing resources, software and maintenance. In this respect, the role of service providers is significant.
Hosting services cover a wide range of capabilities in three broad categories:                (i) Collaborative hosting services include email, internal and external webhosting, collaborative applications and scheduling applications;        (ii) Commerce hosting services include business applications that enable online Business to Business (B2B) trading and Business to Consumer (B2C) e-commerce hosting; and        (iii) Other e-business hosting services include custom-built and Enterprise Resource Planning applications.        
Examples of such hosting services can be found at the following URLS: Netscape Hosting Services White Paper, at                http://home.netscape.com/hosting/v4.0/whitepaper/; “Building a Scalable and Profitable Application Hosting Business”, White Paper, Ensim Corporation, at        http://www.ensim.com/Products/index.htm; IBM: developerWorks: Web architecture library, “IBM Application Framework for e-business: Application hosting services”, Stewart Nickolas, IBM, October 1999, at        http://www-4.ibm.com/software/developer/library/ahs/; and “Hosting with Exchange 2000 Server”, White Paper, at http://www.microsoft.com/exchange/techinfo/ASP planning.htm.        
These hosting services are especially relevant for SMBs, which can access highly functional applications without having to incur a large capital expenditure while maintaining the focus on core competencies. In the absence of such hosting services, the SMB segment has to afford dedicated services and knowledge about the resource requirements such as a central processing unit (CPU), Random Access Memory (RAM) and business applications for running their e-businesses, which can clearly not be a cost-effective solution.
From the service provider's perspective, hosting quality services for the SMB necessitates providing flexible, cost-effective services within a Quality of Service (QoS) guarantee. Planning and optimizing the resource requirements for hosting such services, based on the requirements of its clients, is an important objective for a service provider.
Different approaches for hosting services are described briefly at the following URL: Building a Scalable and Profitable Application Hosting Business”, White Paper, Ensim Corporation, at http://www.ensim.com/Products/index.htm. These different approaches are described briefly hereinafter.
Dedicated Services
The dedicated services model dictates that a client be given an integral number of servers by reserving these exclusively for the client. However, the use of this approach in a SMB context, where a shared server may suffice, may be too expensive. Also in a large enterprise context, using this approach may be prohibitive, since huge reservations may be needed to ensure service during limited peak hours.
Shared Services
The shared services model is a popular method used by service providers, especially for virtual web hosting and applications designed specifically to support multiple customers on a single instance of an application. In this approach, multiple customers and services are hosted on a single server. However, in a shared environment, QoS is difficult to guarantee to clients. A surge in traffic of one client may adversely affect a co-located client. Reliability and security are other issues, which are difficult to address in this approach.
Virtual Servers
The concept of virtual servers is relatively new, but appears to be on the verge of becoming mainstream. Virtual Server technology involves creating multiple logical servers on a single system, enabling individual users to have equal access to computer resources, such as RAM and CPU. The technology enables service providers to use resources more efficiently. Since virtual servers behave like independent physical machines, the virtual services can run more complicated applications such as databases, security and telnet on a shared server. However, while helping in providing fractional solutions, the virtual servers still behave like small independent servers with limited resources. Thus, to guarantee QoS, the service provider must allocate resources for handling the peak loads of its clients, which can be much larger than the average load on the system.
In a conventional system, a client desiring a good QoS must provide for some percentile of the peak load observed. The service provider on the other hand must therefore reserve resources for each client to service the client at peak load. This disadvantageously results in reservation of resources that lie mostly idle in a non-peak load condition.
Thus, a need clearly exists for a system of planning and allocating hosting-service resources in an optimal manner so as to overcome or at least ameliorate one or more of the disadvantages of conventional approaches to providing hosting services.